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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
Wednesday, 20 November 19
AUSTRALIA'S NEW HOPE POSTS 66% SURGE IN Q1 SALEABLE COAL OUTPUT - REUTERS
Australian coal producer New Hope Corp Ltd reported on Tuesday a 66% jump in saleable coal production in the first quarter, as output ramped up at ...
Wednesday, 20 November 19
THE IMO AND THE PRICE OF GAS OR THE IMPACT OF THE INTERNATIONAL MARITIME ORGANISATION'S SULPHUR 2020 LIMIT FOR MARINE FUEL OIL ON THE PRICE OF GAS - KING & SPALDING
The main bunker fuel for ships is High Sulphur Fuel Oil (HSFO, with sulphur up to 3.5% m/m (mass by mass)). This will all change on 1 January 2020 ...
Wednesday, 20 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
While the market expects the next OPEC meeting, there are still no clear signs indicating that the organization will keep supporting oil prices, wh ...
Monday, 18 November 19
CHINA RECORDS STABLE COAL PRODUCTION IN JAN-OCT: XINHUA
China’s raw coal output registered stable growth in the first 10 months, while its imports remained robust, official data showed.
...
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- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Planning Commission, India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
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